New Payment Paradigms: Evolving Transactions

The aftermath of the pandemic has spurred a swift shift towards digitalization across various sectors, especially in finance. José Barrera, Digital & E-Commerce Sr. Manager, Natura & Avon, emphasized the need for intuitive and innovative solutions to drive financial inclusion and reduce reliance on cash during the Mexico Business Forum 2024.

Analicia García, VP of Retail & Commerce, Digital Partners & Fintech, Mastercard Mexico, highlighted that 45% of global spending now occurs in e-commerce, with contactless payments constituting 65% of all physical transactions. However, despite these advancements, Mexico continues to grapple with the widespread use of cash, with over 71% of point-of-sale transactions still cash-based.

García stressed the importance of enabling seamless transactions, even when exceeding budget limits, and emphasized the need for secure digital payment solutions. Measures like promoting 3DS and tokenization are essential to build customer trust and mitigate fraud risks.

Despite progress in electronic payment adoption and the proliferation of mobile wallets, challenges persist, including the high costs associated with card issuance and the need to innovate payment methods beyond traditional approaches. Héctor Meza, Country Manager, Ingenico, highlighted the potential of biometric authentication methods like vein recognition (Palm Pay) to revolutionize payment experiences.

While there is growing momentum towards a cashless society, fueled by environmental benefits and regulatory support, Sebastián de Lara, CEO, Fintech Mexico, acknowledged that traditional cash transactions are likely to coexist with digital payments. Open banking initiatives are driving customization and streamlining payment processes through APIs, yet security concerns remain a hurdle to widespread adoption.

Estephany Ley, Retail Banking Corporate Director, Grupo Coppel, emphasized the importance of transparency and innovation in building customer trust. Ley highlighted the need for convenient and secure payment methods in e-commerce, such as fingerprint identification for credit assessment.

The convergence of anti-fraud measures with user-friendly experiences is crucial for the successful adoption of digital payment technologies. Now is an opportune moment to leverage technological advancements for real-time data exploitation and personalized customer experiences, although their full potential is yet to be realized in Mexico.